LATE SH. DHARAMBIR,HARYANA vs. ITO, SONEPAT

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. N. K. Saini, AM And Sh. A. T. Varkey, JM Asstt. Year : 2010-11 Late Sh. Dharambir, Vs Income Tax Officer, S/o- Sh. Kanshi Ram through L/H Ward-2, Smt. Nirmala, Sonepat VPO, Fazilpur, Dist. Sonepat, Haryana (APPELLANT) (RESPONDENT) PAN No. AHRPD8127H Assessee by : Sh. Suresh Kumar Gupta, Adv. Revenue by : Sh. K. K. Jaiswal, Sr. DR Date of Hearing : 17.11.2015 Date of Pronouncement : 20.01.2016 ORDER Per N. K. Saini, AM:

This is an appeal by the assessee against the order dated 04.12.2014 of ld. CIT(A), Rohtak.

“1. The Ld. CIT(A) has erred both in law and on facts in confirming the addition of Rs.11,13,276/- of the capital receipts in the form of compromise money arising out of legal suit u/s 138 of the Negotiable Instruments Act against the payer for dishonor of cheques.

Dharambir 2. The Ld. CIT(A) has erred both in law and on facts in not quashing the assessment order passed on the one legal heirs of the deceased assessee without bringing on record all the legal heirs of the deceased. 3. The appellant craves leave to add, delete, modify/amend the above grounds of appeal with the permission of the Hon’ble appellate authority.”

3. During the course of hearing the ld. Counsel for the assessee at the very outset submitted that an identical issue having similar facts was a subject matter of adjudication by the ITAT Delhi Bench ‘SMC-1’, New Delhi in for the assessment year 2010-11 in the case of Jai Bhagwan, S/o- Sh. Kanshi Ram Vs ITO, Ward-2, Sonepat wherein the addition of Rs.10,48,172/- was involved and the matter was set aside to the file of the AO. It was further stated that the deceased assessee was brother of Sh. Jai Bhagwan and in similar circumstances the cheque was received against the sale consideration of the agricultural land from M/s Siddharth Co-operative House Building Society Ltd. (copy of the said order was furnished which is placed on record).

Dharambir 5. After considering the submissions of both the parties and the material available on the record, it is noticed that an identical issue having similar facts has already been adjudicated in the case of Sh. Jai Bhagwan Vs ITO (supra) wherein the relevant findings have been given in para 5 of the order dated 28.10.2015 in for the assessment year 2010-11 which read as under:

“5. The submissions of the parties have been heard and the material available on record has been perused. It is seen that in the facts of the present case the assessee was required to explain various entries in its bank accounts. The assessee stated that these were resulting out of the sale of agricultural land and in the said circumstances the belief of the assessee that these facts were in the knowledge of the AO may not be misplaced. However, in the interests of substantial justice, it is considered appropriate to restore the issue back to the AO so as to enable the assessee to bring the necessary facts and evidences on record. The assessee is directed to produce the sale deed in respect of the specific ancestral agricultural land stated to have been sold to the M/s Siddharth Co-operative Housing Building Society Ltd. wherein reference to this specific cheque No. may have been made. The claim it is stated is also supported by the legal suit filed by the assessee u/s 138 of the Negotiable Instruments Act so as to demonstrate that the settlement was qua the sale of ancestral agricultural land on 15.06.2007 which was exempt. Supporting evidences in support of the said claim to be made available by the Dharambir assessee. Thus since necessary facts and evidences have not been placed on record the impugned order is set aside and the issue is restored back to the AO with the direction to decide the same in accordance with law after giving the assessee a reasonable opportunity of being heard. Liberty is given to the assessee to place necessary facts and evidence in support of its claim before the AO.”